National home values rose again in May, climbing 0.5 percent from April to an average price of $159,000, according to a new report from real estate portal Zillow. Home values were up 5.4 percent year-over-year in May, the second-highest annual rate of national appreciation registered in the past 12 months.
Boston’s market paralleled the national one for the month according to Zillow’s data, with prices also rising 5.4 percent year-over-year, to an average of $326,200, according to the firm’s data. Boston prices rose 0.2 percent from April.
Nationally, the 5.4 percent annual gain in May was exceeded in the past year only by January’s 5.6 percent year-over-year increase. Home values have risen or remained flat month-over-month for 19 straight months. The last time home values rose to approximately this level was July 2004.
A majority, 50.8 percent, of the 360 metro areas Zillow covers covered experienced home value appreciation between April and May, including 11 of the 20 Massachusetts metro areas covered by the firm.
For the 12-month period from May 2013 to May 2014, U.S. home values are expected to rise 4.1 percent to approximately $165,448, according to the Zillow Home Value Forecast. The pace of home value appreciation nationwide and in many local markets is expected to moderate as more sellers enter the market and builders begin construction on more new homes, helping ease the supply crunch that has so far contributed heavily to rapid home value appreciation.
"Enjoy it while it lasts, because the housing market will undoubtedly look very different a few years down the road from how it appears now," Zillow Chief Economist Stan Humphries said in a statement. "Inventory constraints are beginning to ease in many areas as more listings and new homes come on line, which will ultimately help end this period of rapid annual home value appreciation above 5 percent. Additionally, as interest rates begin to rise from their historic lows, some demand may also ebb from the market as home purchases become more expensive to finance."
